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History

The Cayman Islands remained largely uninhabited until the 17th century. While there is no archaeological evidence for an indigenous people on the islands, a variety of settlers from various backgrounds made their home on the islands, including pirates, shipwrecked sailors, and deserters from Oliver Cromwell's army in Jamaica.[5]

Cayman Islands National Museum, George Town, Grand Cayman

The first recorded permanent inhabitant of the Cayman Islands, Isaac Bodden, was born on Grand Cayman around 1661. He was the grandson of the original settler named Bodden who was probably one of Oliver Cromwell's soldiers at the taking of Jamaica in 1655.[6]

England took formal control of the Cayman Islands, along with Jamaica, as a result of the Treaty of Madrid of 1670. Following several unsuccessful attempts at settlement, a permanent English-speaking population in the islands dates from the 1730s. With settlement, after the first royal land grant by the Governor of Jamaica in 1734, came the perceived need for slaves.[7] Many were brought to the islands from Africa; this is evident today with the majority of native Caymanians being of African and English descent. The results of the first census taken in the islands in 1802 showed the population on Grand Cayman to be 933 with 545 of those inhabitants being enslaved. Slavery was abolished in the Cayman Islands in 1833. At the time of abolition, there were over 950 Blacks of African ancestry enslaved by 116 white families of English ancestry.[8]

The Heroes Square in the centre of George Town, which commemorates Cayman Islands' war dead. The Legislative Assembly building is at the left.

The Cayman Islands historically have been a tax-exempt destination. On 8 February 1794, the Caymanians rescued the crews of a group of ten merchant ships, including HMS Convert, an incident that has since become known as the Wreck of the Ten Sail. The ships had struck a reef and run aground during rough seas.[10] Legend has it that King George III rewarded the island with a promise never to introduce taxes as compensation for their generosity, as one of the ships carried a member of the King's own family. While this remains a popular legend, the story is not true.[11]

On 11 September 2004 the island of Grand Cayman, which lies largely unprotected at sea level, was hit by Hurricane Ivan, creating an 8-ft storm surge which flooded many areas of Grand Cayman. An estimated 83% of the dwellings on the island were damaged including 4% requiring complete reconstruction. A reported 70% of all dwellings suffered severe damage from flooding or wind. Another 26% sustained minor damage from partial roof removal, low levels of flooding, or impact with floating or wind driven hurricane debris.[13] Power, water and communications were disrupted for months in some areas as Ivan was the worst hurricane to hit the islands in 86 years.[14] Grand Cayman began a major rebuilding process and within two years its infrastructure was nearly returned to pre-hurricane status. Due to the tropical location of the islands, more hurricane or tropical systems have affected the Cayman Islands than any other region in the Atlantic basin; it has been brushed or directly hit, on average, every 2.23 years.[15]

Geography

Map of the Cayman Islands, showing the three main islands about 120 kilometres (75 miles) apart

The Cayman Islands are in the western Caribbean Sea and are the peaks of a massive underwater ridge, known as the Cayman Ridge (or Cayman Rise). This ridge flanks the Cayman Trough, 6,000 m (20,000 ft) deep[16] which lies 6 km (3.7 mi) to the south.[17] The islands lie in the northwest of the Caribbean Sea, east of Quintana Roo, Mexico and Yucatán State, Mexico, northeast of Costa Rica, north of Panama, south of Cuba and west of Jamaica. They are situated about 700 km (430 mi) south of Miami,[18] 750 km (470 mi) east of Mexico,[19] 366 km (227 mi) south of Cuba,[20] and about 500 km (310 mi) northwest of Jamaica.[21]Grand Cayman is by far the largest, with an area of 197 km2 (76 sq mi).[22] Grand Cayman's two "Sister Islands", Cayman Brac and Little Cayman, are about 120 km (75 mi) east north-east of Grand Cayman and have areas of 38 and 28.5 km2 (14.7 and 11.0 sq mi)[23] respectively.

George Town waterfront

All three islands were formed by large coral heads covering submerged ice age peaks of western extensions of the Cuban Sierra Maestra range and are mostly flat. One notable exception to this is The Bluff on Cayman Brac's eastern part, which rises to 43 m (141 ft) above sea level, the highest point on the islands.[24]

On 11 and 12 September 2004, Hurricane Ivan struck the Cayman Islands. The storm resulted in two deaths and caused great damage to the infrastructure on the islands. The total economic impact of the storms was estimated to be $3.4 billion.[31]

Demographics

The Cayman Islands have more registered businesses than people.[32] In mid-2011 the Cayman Islands had an estimated population of about 56,000, representing a mix of more than 100 nationalities. Out of that number, about half are of Caymanian descent. About 60% of the population is of mixed race (mostly mixed African-Caucasian). The islands are almost exclusively Christian, with large numbers of Baptists, Presbyterians and Catholics, but also hosts Jewish,[33] Muslim and Hindu communities. The vast majority of the population resides on Grand Cayman, followed by Cayman Brac and Little Cayman, respectively.[34] The population is projected to rise to 60,000 by 2020. The capital of the Cayman Islands is George Town, on the southwest coast of Grand Cayman.

District populations

Traditional Caymanian home at East End, Grand Cayman

According to the Cayman Islands 2010 census the estimated resident population is 54,878 people,[35] broken down as follows:

Economy

With an average income of around KYD$47,000, Caymanians have the highest standard of living in the Caribbean. According to the CIA World Factbook, the Cayman Islands GDP per capita is the 14th highest in the world.[36] The islands print their own currency, the Cayman Islands dollar (KYD), which is pegged to the US dollar 1.227 USD to 1 KYD. However, in many retail stores throughout the island, the KYD is typically traded at 1.25 USD.[37] There is marked poverty among native people of the islands, as well as pressure to maintain a standard of living inconsistent with their means. The government has established a Needs Assessment Unit to relieve poverty in the islands.[38]

On 15 July 2012 the Cayman Islands premier McKeeva Bush announced the intended introduction of a "community enhancement fee" in the form of a payroll tax to be paid solely by expatriate workers. Caymanians themselves were to remain exempt from this tax. This would have been the first direct tax on income in the Cayman Islands' history.[39] Bush also announced a five percent fee on "certain categories of employment" to be payable by businesses. However, the payroll tax was scrapped before it had been implemented.[40]

Tourism

One of Grand Cayman's main attractions is Seven Mile Beach, site of a number of the island's hotels and resorts. Named one of the Ultimate Beaches by Caribbean Travel and Life, Seven Mile Beach is on the western shore of Grand Cayman Island. It is a public property and possible to walk the full length of the beach, past all the hotels, resorts, and public beach bars.[41] Historical sites in Grand Cayman, such as Pedro St James Castle in Savannah, also attract visitors.[42] Tourists also visit the Sister Islands, Little Cayman[43] and Cayman Brac.[44]

Stingrays pass each other at Stingray City sandbar off Grand Cayman Island

All three islands offer scuba diving, and the Cayman Islands are home to several snorkelling locations where tourists can swim with stingrays. The most popular area to do this is Stingray City, Grand Cayman. Stingray City is a top attraction in Grand Cayman and originally started in the 1980s, when divers started feeding squid to stingrays. The stingrays started to associate the sound of the boat motors with food, and thus visit this area year round.[45]

There are two shipwrecks off the shores of Cayman Brac, including the MV Captain Keith Tibbetts;[46] Grand Cayman also has several shipwrecks off its shores, including one deliberate one. On 30 September 1994 the USS Kittiwake was decommissioned and struck from the Naval Vessel Register. In November 2008 her ownership was transferred for an undisclosed amount to the government of the Cayman Islands, which had decided to sink the Kittiwake in June 2009 to form a new artificial reef off Seven Mile Beach, Grand Cayman. Following several delays, the ship was finally scuttled according to plan on 5 January 2011. The Kittiwake has become a dynamic environment for marine life. While visitors are not allowed to take anything, there are endless sights. Each of the five decks of the ship offers squirrelfish, rare sponges, Goliath groupers, urchins, and more. Experienced and beginner divers are invited to swim around the Kittiwake.[47] Pirates Week, an annual 11-day November festival, was started in 1977 by Jim Bodden, then Minister of Tourism, to boost tourism during the country's tourism slow season.[48]

Other Grand Cayman tourist attractions include the Ironshore landscape of Hell, the 23-acre (93,000 m2) marine theme park Boatswain's Beach, also home of the Cayman Turtle Farm, the production of gourmet sea salt, and the Mastic Trail, a hiking trail through the forests in the centre of the island. The National Trust for the Cayman Islands provides guided tours weekly on the Mastic Trail and other locations.[49]

Another attraction to visit on Grand Cayman is the Observation Tower, located in Camana Bay. The Observation Tower is 75 feet tall and provides 360-degree views across Seven Mile Beach, George Town, the North Sound, and beyond. It is free to the public and climbing the tower has become a popular thing to do in the Cayman Islands.[50]

Points of interest include the East End Light (sometimes called Gorling Bluff Light), a lighthouse at the east end of Grand Cayman island. The lighthouse is the centrepiece of East End Lighthouse Park, managed by the National Trust for the Cayman Islands; the first navigational aid on the site was the first lighthouse in the Cayman Islands.

The Cayman Islands are the fifth-largest banking centre in the world,[52] with $1.5 trillion in banking liabilities.[51] In June 2008 there were 279 banks, 19 of which were licensed to conduct banking activities with domestic (Cayman-based) and international clients, and the remaining 260 were licensed to operate on an international basis with only limited domestic activity. Financial services generated CI$1.2 billion of GDP in 2007 (55% of the total economy), 36% of all employment and 40% of all government revenue. In 2010, the country ranked fifth internationally in terms of value of liabilities booked and sixth in terms of assets booked. It has branches of 40 of the world's 50 largest banks. The Cayman Islands are the second largest captive domicile (Bermuda is largest) in the world with more than 700 captives, writing more than US$7.7 billion of premiums and with US$36.8 billion of assets under management.[53]

Since the introduction of the Mutual Funds Law in 1993, which has been copied by jurisdictions around the world, the Cayman Islands have grown to be the world's leading offshore hedge fund jurisdiction.[54] In June 2008, it passed 10,000 hedge fund registrations, and over the year ending June 2008 CIMA reported a net growth rate of 12% for hedge funds.[56]

Starting in the mid-late 1990s, offshore financial centres, such as the Cayman Islands, came under increasing pressure from the OECD for their allegedly harmful tax regimes, where the OECD wished to prevent low-tax regimes from having an advantage in the global marketplace. The OECD threatened to place the Cayman Islands and other financial centres on a "black list" and impose sanctions against them.[57] However, the Cayman Islands successfully avoided being placed on the OECD black list in 2000 by committing to regulatory reform to improve transparency and begin information exchange with OECD member countries about their citizens.[57]

In 2004, under pressure from the UK, the Cayman Islands agreed in principle to implement the European Union Savings Directive (EUSD), but only after securing some important benefits for the financial services industry in the Cayman Islands. As the Cayman Islands are not subject to EU laws, the implementation of the EUSD is by way of bilateral agreements between each EU member state and the Cayman Islands. The government of the Cayman Islands agreed on a model agreement, which set out how the EUSD would be implemented with the Cayman Islands.[58]

A report published by the International Monetary Fund (IMF), in March 2005, assessing supervision and regulation in the Cayman Islands' banking, insurance and securities industries, as well as its money laundering regime, recognised the jurisdiction's comprehensive regulatory and compliance frameworks. "An extensive program of legislative, rule and guideline development has introduced an increasingly effective system of regulation, both formalizing earlier practices and introducing enhanced procedures", noted IMF assessors. The report further stated that "the supervisory system benefits from a well-developed banking infrastructure with an internationally experienced and qualified workforce as well as experienced lawyers, accountants and auditors", adding that, "the overall compliance culture within Cayman is very strong, including the compliance culture related to AML (anti-money laundering) obligations".[59][60]

On 4 May 2009, the United States President, Barack Obama, declared his intentions to curb the use of financial centres by multinational corporations. In his speech, he singled out the Cayman Islands as a tax shelter.[61] The next day, the Cayman Island Financial Services Association submitted an open letter to the president detailing the Cayman Islands' role in international finance and its value to the US financial system.[62]

The Cayman Islands were ranked as the world's second most significant tax haven on the Tax Justice Network's "Financial Secrecy Index" from 2011, scoring slightly higher than Luxembourg and falling behind only Switzerland.[63] In 2013, the Cayman Islands were ranked by the Financial Secrecy Index as the fourth safest tax haven in the world, behind Hong Kong but ahead of Singapore. In the first conviction of a non-Swiss financial institution for US tax evasion conspiracy, two Cayman Islands financial institutions pleaded guilty in Manhattan Federal Court in 2016 to conspiring to hide more than $130 million in Cayman Islands bank accounts. The companies admitted to helping US clients hide assets in offshore accounts, and agreed to produce account files of non-compliant US taxpayers.[64]

Labour

The Cayman Islands have a small population and therefore a limited work force. Work permits may therefore be granted to foreigners. On average, there have been more than 21,000 foreigners holding valid work permits.[65]

Work permits for non-citizens

To work in the Cayman Islands as a non-citizen, a work permit is required. This involves passing a police background check and a health check. A prospective immigrant worker will not be granted a permit unless certain medical conditions are present which include testing negative for syphilis or HIV. A permit may be granted to individuals on special work.

A foreigner must first have a job to move to the Cayman Islands. The employer applies and pays for the work permit.[66] Work permits are not granted to foreigners who are in the Cayman Islands (unless it is a renewal). The Cayman Islands Immigration Department requires foreigners to remain out of the country until their work permit has been approved.[67]

The Cayman Islands presently imposes a controversial "rollover" in relation to expatriate workers who require a work permit. Non-Caymanians are only permitted to reside and work within the territory for a maximum of nine years unless they satisfy the criteria of key employees. Non-Caymanians who are "rolled over" may return to work additional nine-year periods, subject to a one-year gap between their periods of work. The policy has been the subject of some controversy within the press. Law firms have been particularly upset by the recruitment difficulties that it has caused.[68] Other less well-remunerated employment sectors have been affected as well. Concerns about safety have been expressed by diving instructors, and realtors have also expressed concerns. Others support the rollover as necessary to protect Caymanian identity in the face of immigration of large numbers of expatriate workers.[69]

Concerns have been expressed that in the long term, the policy may damage the preeminence of the Cayman Islands as an offshore financial centre by making it difficult to recruit and retain experienced staff from onshore financial centres. Government employees are no longer exempt from this "rollover" policy, according to this report in a local newspaper.[70] The governor has used his constitutional powers, which give him absolute control for the disposition of civil service employees, to determine which expatriate civil servants are dismissed after seven years service and which are not.citation needed

This policy is incorporated in the Immigration Law (2003 revision), written by the United Democratic Party government, and subsequently enforced by the People's Progressive Movement Party government. Both governments agree to the term limits on foreign workers, and the majority of Caymanians also agree it is necessary to protect local culture and heritage from being eroded by a large number of foreigners gaining residency and citizenship.[71]

A governor is appointed by the Queen of the United Kingdom on the advice of the British Government to represent the monarch.[75] Governors can exercise complete legislative and executive authority if they wish through blanket powers reserved to them in the constitution.[76] Bills which have passed the Legislative Assembly require Royal Assent before becoming effective. The Constitution empowers the governor to withhold Royal Assent in cases where the legislation appears to him or her to be repugnant to or inconsistent with the Constitution or affects the rights and privileges of the Legislative Assembly or the Royal Prerogative, or matters reserved to the governor by article 55.[77] The executive authority of the Cayman Islands is vested in the Queen and is exercised by the Government, consisting of the governor and the Cabinet.[78] There is an office of the deputy governor, who must be a Caymanian and have served in a senior public office. The deputy governor is the acting governor when the office of governor is vacant, or the governor is not able to discharge his duties or is absent from the Cayman Islands.[79] The current governor of the Cayman Islands is Her ExcellencyHelen Kilpatrick, CBE, and the current deputy governor is Franz Manderson, MBE.

The Cabinet is composed of two official members and seven elected members, called ministers; one of whom is designated premier.

The official members are the deputy governor and the attorney general. They are appointed by the governor in accordance with Her Majesty's instructions, and although they have seats in the Legislative Assembly, under the 2009 Constitution, they do not vote.

The seven ministers are voted into office by the 18 elected members of the Legislative Assembly of the Cayman Islands. One of the ministers, the leader of the majority political party, is appointed premier by the governor.

After consulting the premier, the governor allocates a portfolio of responsibilities to each Cabinet member. Under the principle of collective responsibility, all ministers are obliged to support in the Assembly any measures approved by Cabinet.

Almost 80 departments, sections and units carry out the business of government, joined by a number of statutory boards and authorities set up for specific purposes, such as the Port Authority, the Civil Aviation Authority, the Immigration Board, the Water Authority, the University College Board of Governors, the National Pensions Board and the Health Insurance Commission.

Defence and law enforcement

The defence of the Cayman Islands is the responsibility of the United Kingdom. Law enforcement in the country is provided chiefly by the Royal Cayman Islands Police Service and the Cayman Islands Customs Department. These two agencies co-operate in aspects of law enforcement, including their joint marine unit. The Cayman Islands Cadet Corps was formed in March 2001 and carries out military-type training with teenage citizens of the country.[80]

Taxation

No direct taxation is imposed on residents and Cayman Islands companies. The government receives the majority of its income from indirect taxation. Duty is levied against most imported goods, which is typically in the range of 22% to 25%. Some items are exempted, such as baby formula, books, cameras and certain items are taxed at 5%. Duty on automobiles depends on their value. The duty can amount to 29.5% up to $20,000.00 KYD CIF (cost, insurance and freight) and up to 42% over $30,000.00 KYD CIF for expensive models. The government charges flat licensing fees on financial institutions that operate in the islands and there are work permit fees on foreign labour. A 13% government tax is placed on all tourist accommodations in addition to US$37.50 airport departure tax which is built into the cost of an airline ticket. There are no taxes on corporate profits, capital gains, or personal income. There are no estate or death inheritance taxes payable on Cayman Islands real estate or other assets held in the Cayman Islands.[81]

Foreign relations

Foreign policy is controlled by the United Kingdom, as the islands remain an overseas territory of the United Kingdom. Although in its early days, the Cayman Islands' most important relationships were with Britain and Jamaica, in recent years, as a result of economic dependence, a relationship with the United States has developed.

Though the Cayman Islands are involved in no major international disputes, they have come under some criticism due to the use of their territory for narcotics trafficking and money laundering. In an attempt to address this, the government entered into the Narcotics Agreement of 1984 and the Mutual Legal Assistance Treaty of 1986 with the United States, to reduce the use of their facilities associated with these activities. In more recent years, they have stepped up the fight against money laundering, by limiting banking secrecy, introducing requirements for customer identification and record keeping, and requiring banks to co-operate with foreign investigators.

Due to their status as an overseas territory of the UK, the Cayman Islands have no representation either in the United Nations or in most other international organisations. However, the Cayman Islands still participates in some international organisations, being an associate member of Caricom and UNESCO, and a member of a sub-bureau of Interpol.[82]

The defence and internal security of the Cayman Islands is the responsibility of the United Kingdom.

Infrastructure

Ports

George Town is the port capital of Grand Cayman. There are no berthing facilities for cruise ships, but up to 4 cruise ships can anchor in designated anchorages. There are three cruise terminals in George Town, the North, South, and Royal Watler Terminals. The ride from the ship to the terminal is about 5 minutes.[83]

The Cayman Islands Civil Service College, a unit of Cayman Islands government organised under the Portfolio of the Civil Service, is in Grand Cayman. Co-situated with University College of the Cayman Islands, it offers both degree programs and continuing education units of various sorts. The college opened in 2007 and is also used as a government research centre.

Health and public safety

Healthcare

There are four hospitals in the Cayman Islands. Grand Cayman is home to the private Health City Cayman Islands as well as the Chrissie Tomlinson Memorial Hospital. The public hospitals include the Cayman Islands Hospital (commonly known as the George Town Hospital); and Faith Hospital on Cayman Brac.[88]

In 2007, a magnetic resonance imaging (MRI) unit was installed at the Chrissie Tomlinson Memorial Hospital, replacing the one destroyed by Hurricane Ivan in 2004. In 2009, a stand-alone open MRI facility was opened. This centre provides MRI, CT, X-ray and DEXA (bone density) scanning. Also housed in this building is the Heart Health Centre, which provides ultrasound, nuclear medicine, echocardiography and cardiac stress testing.[89]

For divers and others in need of hyperbaric oxygen therapy, there is a two-person recompression chamber at the Cayman Islands Hospital on Grand Cayman, run by Cayman Hyperbaric Services. Hyperbaric Services has also built a hyperbaric unit at Faith Hospital in Cayman Brac.[90][91]

In 2003, the Cayman Islands became the first country in the world to mandate health insurance for all residents.[92]

Emergency services

The Royal Cayman Islands Police Service (RCIPS) provides law enforcement for the three islands. Regular off-shore marine and air patrols are conducted by the RCIP using a small fleet of vessels and a helicopter. Grand Cayman is a port of call for Britain'sRoyal Navy and the United States Coast Guard who often assist with sea rescues when their resources are in the Cayman Islands area. The Cayman Islands Fire Service provides fire prevention, fire fighting and rescue.[93] Its headquarters are in George Town and has substations in Frank Sound, West Bay, Cayman Brac and Little Cayman.[94] Emergency Medical Services are provided by paramedics and Emergency Medical Technicians using ambulances based in George Town, West Bay and North Side in Grand Cayman and in Cayman Brac. EMS is managed by the Government's Health Services Authority.

Grand Cayman Island, from space

Access to Emergency Services is available using 9-1-1, the Emergency telephone number, the same number as is used in Canada and the United States. The Cayman Islands Department of Public Safety's Communications Centre processes 9-1-1 and non-emergency law enforcement, EMS, fire, and Search and Rescue calls for all three islands. The Communications Centre dispatches RCIP and EMS units directly however, the Cayman Islands Fire Service maintains their own dispatch room at the airport fire station.citation needed

Health City Cayman Islands

Sports

Truman Bodden Sports Complex is a multi-use complex in George Town. The complex is separated into an outdoor, six-lane 25-metre (82 ft) swimming pool, full purpose track and field and basketball/netball courts. The field surrounded by the track is used for association football matches as well as other field sports. The track stadium holds 3,000 people.

Squash is popular in the Cayman Islands with a vibrant community of mostly ex-pats playing out of the 7 court South Sound Squash Club. In addition, the women's professional squash association hosts one of their major events each year in an all glass court being set up in Camana Bay. In December 2012, the former Cayman Open will be replaced by the Women's World Championships, the largest tournament in the world. The top Cayman men's player, Cameron Stafford is No. 2 in the Caribbean and ranked top 200 on the men's professional circuit.

In the 21st century, skateboarding has become popular among the youth.citation needed

In February 2010, the first purpose built track for kart racing in the Cayman Islands was opened.[99] Corporate karting Leagues at the track have involved widespread participation with 20 local companies and 227 drivers taking part in the 2010 Summer Corporate Karting League.[100]

Music

The Cayman National Cultural Foundation manages the F.J. Harquail Cultural Centre and the US$4 million Harquail Theatre. The Cayman National Cultural Foundation, established in 1984, helps to preserve and promote Cayman folk music, including the organisation of festivals such as Cayman Islands International Storytelling Festival, the Cayman JazzFest, Seafarers Festival and Cayfest.citation needed

Media

There are two print newspapers currently in circulation throughout the islands: the Caymanian Compass and Cayman Reporter. There are numerous online news services including Cayman News Service and the Cayman Compass online edition. A local television station, CITN – Cayman 27, shows Cayman Islands news.[101]Local radio stations are broadcast throughout the islands.

Feature films that have been filmed in the Cayman Islands include: The Firm, Haven, Cayman Went[102] and Zombie Driftwood.[103]